According to the 2003/2004 IT Function Salary Differentials Worldwide report from Mercer Human Resource Consulting, pay levels for corporate IT professionals vary considerably around the world. IT pay generally is higher in Western Europe and North America than in Asia and Eastern Europe. Mercer Human Resource Consulting’s study includes pay data for more than 43,000 information technology professionals in nearly 3,300 companies in 32 countries worldwide. The analysis of pay differences is based on IT jobs categorized into four levels of expertise: team leader/senior professional, supervisor/experienced professional, manager/specialist, and senior manager/expert.
David Van De Voort , global leader of Mercer’s IT Workforce Effectiveness group says “Companies that are exploring off-shoring need to consider the level and type of work they are moving off-shore to gain a true understanding of the potential costs and savings.”

Bonuses and incentives
Low-paying countries deliver a larger percentage of total pay in the form of variable short-term incentives, Mercer’s survey reveals. Among the 10 lowest-paying countries, the percentage of variable pay ranges from a high of 15 percent to a low of three percent, with most countries having a variable pay component of eight percent. In high-paying countries, the percentage of variable pay ranges from a high of 10 percent to a low of one percent, with four percent representing typical practice. “Although the U.S culture is considered aggressively entrepreneurial and competitive, U.S companies actually deliver a lower proportion of pay-for-performance than 29 of 32 countries,” comments Van De Voort. India is one of the countries which places the largest percentage of pay at risk (10 to 15 percent) for the lowest IT experience level (team leader/senior professional).

The value of experience
How does the pay for the lowest IT experience level compare to the one with the most experience? According to Mercer’s survey, lower-paying countries generally provide a larger increase in pay as the job becomes more senior. Higher-paying countries have flatter pay practices, with less differentiation between job levels. Several factors contribute to this variation, including broad cultural values, economic system differences, and the maturity of the IT industry. Countries with a rapidly growing IT economy, such as India, reward greatly for expertise and responsibility. Still other countries in North America pay for performance irrespective of tenure.